6 Tips to Get Higher Returns from Share Trading

Posted by Rashmi Dey on November 26th, 2020

Many investors bought a stock on someone’s advice thinking that they might receive positive returns from the stock market. However, this is not true in many cases. Needless to say, share trading is quite a risky game as you need to learn a lot of things before stepping into the stock market. However, it is possible to play safe while dealing with the stock market and earn consistent returns.

The misconception about stock trading is that investors feel they can make easy money in the stock market. But there are no free lunches. Share trading requires a lot of patience and discipline. Also, the success of share trading heavily depends on research, market knowledge and some experience.

In this article, we will share the best tips to get higher returns from share trading:

1. Diversify your stocks

As the famous quote is saying never put all of your eggs in one basket. The same strategy applies to share trading. In case, if a stock looks like a potential stock that gives a guarantee to success, make sure to not place all the money on it. Diversification allows you to distribute your capital among different stocks. Not only does it help to provide you greater returns, but also helps to minimize your risks.

2. Focus on Technical Analysis

With the assistance of technical analysis, traders can easily predict the market trends and price movements. Technical analysis allows traders to identify the pattern of stocks through charts and candlesticks. Also, it helps traders to analyze the past performance of a stock which is crucial for any trader.

3. Limit Your Focus

Post opening a trading account, you will receive vast opportunities to invest in the share market. Hence it is suggested to focus on a few stocks that are capable of giving traders positive returns. Focusing on a few stocks will save you from suffering from huge losses.Therefore it is suggested to maintain your focus while doing online trading.

4. Stay Updated

For consistent growth and better returns, it is suggested to stay updated with what’s happening in the stock market is a right move. Make yourself updated with the latest financial and market news. Also, traders follow market experts, speculations provided in articles, blogs which help them to make the right decisions.

5. Don't hesitate to short your stocks when needed

If a trader feels that the investment done by him gives them maximum returns; they often prefer to buy it with an intention of holding. However, during bearish market trends, the strategy can backfire if you have opted to go long with the traders. In such a situation, it is advised to short sell your stocks, even if the selling price of such stocks are higher. This strategy will increase your profit at the same time, it helps to prevent you from suffering huge losses.

6. Focus On your Trade Timing

The biggest benefits of having an online stock trading account is that you can trade anytime at any place. Plus, all the trading related information is available at your fingertips. Time here plays a crucial role as with the help of it, traders can buy/sell shares at the right moment.

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